Saturday, November 24, 2012

Issues of waiver, disclosure to support structure, in ePlus v. Lawson

an appeal and a cross-appeal arising from an infringement suit brought by ePlus, Inc. against Lawson Software, Inc. (“Lawson”), in which a jury found that Lawson infringes ePlus’s method and system claims. Lawson appeals, arguing that the system claims are indefinite and that the evidence of infringement of the method claims does not support the jury’s verdict.

the defendant Lawson wins on several points of the appeal:

We agree with Lawson that the district court erred in finding that the system claims are not indefinite, and in that respect, we reverse the district court’s determination. We also reverse in part the district court’s denial of JMOL to Lawson and accordingly vacate the judgment of direct and induced infringement entered based on two of the asserted method claims.

Of the procedural matter of waiver:

First, we hold that Lawson has not waived its indefiniteness argument regarding the means for processing limitation. Prior to trial, Lawson moved for summary judgment, arguing that the specification does not adequately disclose a structure for the “means for processing” limitation. J.A. 7573-74. The district court rejected Lawson’s argument, and Lawson did not raise the issue again at trial. Nor did Lawson raise the issue in its first (pre-verdict) JMOL motion. See id. at 3851. At the hearing relating to that motion, however, Lawson’s attorney informed the district court that it sought a ruling that the system claims are indefinite. Id. at 3928-31. The district court responded that in its view, Lawson could not seek a JMOL based on indefiniteness because the issue was not raised during trial. After the jury verdict was delivered, Lawson again sought a JMOL. This time, Lawson argued (in writing) that the system claims are invalid for indefiniteness, yet it did not mention any particular limitation.

The reasoning for "no waiver":

when the arguments with respect to indefiniteness are not being raised for the first time on appeal, we do not readily find a waiver. See, e.g., Noah Sys., Inc. v. Intuit Inc., 675 F.3d 1302, 1311 (Fed. Cir. 2012) (holding that because Noah had made the same indefiniteness arguments during claim construction before the district court, waiver did not apply); United Techs., 189 F.3d at 1344 (“A denial of a motion for summary judgment may be appealed, even after a final judgment at trial, if the motion involved a purely legal question and the factual disputes resolved at trial do not affect the resolution of that legal question.”); cf. Lisle Corp. v. A.J. Mfg. Co., 398 F.3d 1306, 1317 (Fed. Cir. 2005) (holding that A.J. had waived its indefiniteness defense where, in the Final Pretrial Order, A.J. merely reserved the right to appeal the defense contingent on this court’s adopting its proposed claim construction of “detachably cooperative,” which we re- jected). Moreover, the district court and ePlus were made aware of Lawson’s indefiniteness argument regarding the “means for processing” limitation—not just at the sum- mary judgment stage, but also at the JMOL stage.

AND

In light of the specific facts of this case, Lawson was not required to ignore the writing on the wall and press the issue over and over again to preserve it for appeal. In sum, we reject ePlus’s waiver argument. See also Harris v. Ericsson, 417 F.3d 1241 (Fed. Cir. 2005) (“An appellate court retains case-by-case discretion over whether to apply waiver.”).

Relying on prior art to supply structure does NOT work:

The indefiniteness inquiry is concerned with whether the bounds of the invention are sufficiently demarcated, not with whether one of ordinary skill in the art may find a way to practice the invention. Aristocrat, 521 F.3d at 1337. To assess whether a claim is indefinite, therefore, we do not “look to the knowledge of one skilled in the art apart from and unconnected to the disclosure of the patent.” Id. (quoting Med. Instrumentation & Diag- nostics Corp. v. Elekta AB, 344 F.3d 1205, 1212 (Fed.Cir.2003)). We rather “look at the disclosure of the patent and determine if one of skill in the art would have understood that disclosure to encompass [the required structure].” Aristocrat, 521 F.3d at 1337 (quoting Med. Instrumentation, 344 F.3d at 1212). Here, the specifica- tion does not disclose any structure that is responsible for generating purchase orders. There is no instruction for using a particular piece of hardware, employing a specific source code, or following a particular algorithm. There is therefore nothing in the specification to help cabin the scope of the functional language in the means for process- ing element: The patentee has in effect claimed every- thing that generates purchase orders under the sun. The system claims are therefore indefinite.

The Typhoon case is distinguished:

Finally, contrary to ePlus’s argument, our decision in Typhoon Touch Technologies, Inc. v. Dell, Inc., 659 F.3d 1376, 1385-86 (Fed. Cir. 2011), does not compel a different result. There, the district court had found that the patent claim was indefinite because it did not disclose the source code or mathematical algorithm for a particular means plus limitation. We reversed, noting that “it suffices if the specification recites in prose the algorithm to be imple- mented by the programmer.” Id. That holding has no application here: The problem here is not the adequacy of the substance or form of the disclosure, but the absence of any disclosure at all. See also Aristocrat, 521 F.3d at 1337 (“The question . . . is not whether the algorithm that was disclosed was described with sufficient specificity, but whether an algorithm was disclosed at all.”). Unlike in Typhoon Technologies, there is not even a recitation in simple prose that can be deciphered as a structural limitation on the patent claims. Thus, ePlus’s reliance on Typhoon is unavailing. In sum, we hold that ePlus’s system claims are indefinite.

Of excluding an expert on damages:

The district court found that Dr. Mangum’s analytical method was flawed and unreliable. In particular, it found that the license agreements were not sufficiently proba- tive because they were obtained during litigation and included lump-sums received for multiple patents and cross-licensing deals. The district court also observed that Dr. Mangum had ignored the settlements that pro- duced smaller rates, even though one of them included a percentage rate rather than a lump sum.
ePlus argues that the district court erred and offers a number of justifications that purportedly support Dr. Mangum’s analysis. We need not explore each one of ePlus’s justifications, however, for the applicable abuse of discretion standard of review is highly deferential. It suffices to state that we are satisfied that given the district court’s observations about Dr. Mangum’s analysis, there is ample justification to arrive at the conclusion reached by the district court. ePlus’s arguments to the contrary, therefore, are not persuasive.

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I'm a patent lawyer located in central New Jersey. I have a J.D. from the University of Chicago and a Ph.D. from Stanford University, where I studied graphite intercalation compounds at the Center for Materials Research. I worked at Exxon Corporate Research in areas ranging from engine deposits through coal and petroleum to fullerenes. An article that I wrote in The Trademark Reporter, 1994, 84, 379-407 on color trademarks was cited by Supreme Court in Qualitex v. Jacobson, 514 US 159 (1995) and the methodology was adopted
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